First round against Russia before the French justice

On 29 November the Tribunal de Grande Instance of Nice, the French court of the first instance, held its first hearing in connection with the attempts undertaken by the Russian State corporation to carry out the decision of the Moscow Commercial Court against French citizen and former senator Sergei Pugachev. The Moscow court’s decision was rendered on 30 of April 2015 and declared the Sergei Pugachev’s subsidiary liability.

The Mezhprombank bank, founded by Sergei Pugachev in 1992, was declared bankrupt in 2010. By that time, however, the bank no longer belonged to Sergei Pugachev, who had left the Board of Directors some nine years earlier.

On 30 April 2015 the Moscow Commercial Court issued a ruling that declared Sergei Pugachev, as well as three of the Bank’s managers, responsible for the Bank’s liabilities amounting to over 1 billion euros.

The case was heard by a sole judge, namely I.I. Kleandrov, even though the Russian law prescribes that bankruptcy cases be heard exclusively by a panel of judges. The ruling was issued by Judge Kleandrov after a hearing of about three hours, suggesting that in the course of some 200 minutes the judge was able to analyse 342 volumes of documentary evidence and study over 200 of the Bank’s contracts, to which the representatives of the Russian Federation referred. All the rulings issued by Judge Kleandrov as a sole judge were subsequently cancelled by the Supreme Court of the Russian Federation (decision dated 19 December 2016).

On 29 November Sergei Pugachev’s counsels challenged the competence of the Russian State agency to initiate proceedings against Sergei Pugachev in France, on the grounds that the Russian Federation had failed to comply with a number of compulsory legal requirements, thereby violating French and international law.

Sergei Pugachev’s lawyers also claimed that the interests of an objective and fair trial did not allow to examine the issue of carrying out in France the decision of the Moscow Commercial Court, until the French justice was able to complete the previously initiated enquiry against the managers of the Russian State Agency, and until the arbitral tribunal comprised of distinguished international arbitrators Eduardo Zuleta-Jaramillo, Thomas Clay and Bernardo Cremades, sitting at the Hague International Court, had come to a decision on the violation by the Russian Federation of its international obligations regarding the protection of Sergei Pugachev’s investments in Russia. It should be recalled that in 2015, before any attempts were made to have the decision of the Moscow Commercial Court carried out in France, Sergei Pugachev had initiated arbitration proceedings against the Russian Federation before the Hague International Court for an amount in excess of 12 billion dollars, in connection with the expropriation of his assets in the territory of the Russian Federation and damages caused to him in other jurisdictions, including France. The arbitration court is due to issue a ruling the the course of 2019.

According to David Goldberg from the law firm White&Case, who represents the interests of the Russian Federation before the Hague International Court in the case Pugachev v Russia, “this is Pugachev’s personal dispute with Putin”.

In addition Sergei Pugachev’s lawyers stress that an attempt to have the Russian ruling recognised in France is, of itself, one more element in the grand-scale process of expropriating Pugachev’s assets, which was begun by Putin back in the late 2000s and early 2010s.

It must be said that Russia does not limit itself to strictly legal methods. In 2014 Sergei Pugachev filed a claim before the Tribunal de Grande Instance of Paris for the crimes of extortion, kidnapping and death threats, committed in the territory of the French Republic by a group of persons belonging to the leadership of the Russian State agency. The claim rests on documentary evidence and the investigation is underway, with the claim being examined by investigating judge Charlotte Bilger. After an explosive device was found under former senator Pugachev’s car, only extreme security measures provided by France’s special services have been able to guarantee the safety of Sergei Pugachev and his family.

The vice president of the Court of Nice, Hicham Melhem is expected to render his decision on 29 January 2019, after which it will become clear whether Russia is able to take part in judicial proceedings in the territory of France or whether its claims against Sergei Pugachev will be definitively rejected.

The interests of Sergei Pugachev in France are represented by the law firm De Baecque Fauré Bellec Avocats.

The interests of the Russian Federation are represented by the law firm Hogan Lovells.

 

 

 

The press service of Sergei Pugachev

In connection with the London High Court hearing of October 23 2018

The Russian State is continuing to persecute Mr Pugachev by manipulating the English legal system.

 On October 23 2018 London’s High Court heard the latest stage of the Russian state’s case against Mr Pugachev.

The hearing took place despite the fact that at the moment there is no ruling of the Russian court against Mr Pugachev that has any legal force. This means that the Russian state – and the lawyers representing it in England through Hogan Lovells International LLP law firm — do not have any right to file any lawsuits or applications based on the decisions of the Russians courts in any other jurisdiction.

Moscow’s Arbitration Court has already issued a ruling that cancelled a previous decision finding Mr Pugachev responsible for the bankruptcy of Mezhprombank — a position that has been upheld by the Supreme Court of the Russian Federation. The Supreme Court of the Russian Federation must now issue a separate judicial order confirming the cancellation of the ruling against him, and Mr Pugachev filed an application with the Supreme Court to do so in September 2018.

The judge hearing the case on October 23 had given Mr Pugachev permission ahead of time to take part in the hearing via videolink from France, where he is now resident, and Mr Pugachev had made all the necessary technical checks in preparation. Despite all these efforts, it was not possible to make a connection with the court on October 23. For an hour, the English court said technical problems were to blame for the lack of connection. But later Judge Price’s clerk, Nichola Pierce, admitted that Judge Price at the last minute – after he had read Mr Pugachev’s statement of defense sent to the court – took the decision not to allow Mr Pugachev to participate in the hearing. During the hearing, Judge Price said that he had acquainted himself with Mr Pugachev’s position and “did not find anything useful in it for the court”. (The Guardian)

In the view of Mr Pugachev and his lawyers, these actions by the English court violate his right to a fair trial under Article 6 of the Convention on Human Rights.

The decision of the English court will be appealed.

Press service of Sergei Pugachev

Russia to be defended by David Goldberg of White & Case LLP in the $12 billion Pugachev Hague arbitration proceedings

The Russian Federation has named David Goldberg of White & Case law firm to represent its interests before the Permanent Court of Arbitration (Hague, Netherlands) in connection with the $12 billion arbitration proceedings brought by Sergei Pugachev against Russia for expropriation of his empire starting in 2010. The White & Case legal team will be led by David Goldberg who was born in the USSR in 1968 and member of the International Centre for Legal Protection established by Russia to prevent Yukos from collecting on its $50 billion award against Russia.

Sergei Pugachev, a French national and international investor, initiated arbitration proceedings against Russia for $12 billion due to breaches by Russia of the Bilateral Investment Treaty between France and the USSR signed in Paris on 4 July 1989.  Pugachev’s claim is the largest investment treaty claim ever filed by any single individual against a State. Pugachev’s claim is principally concerning actions by Russia and its agents resulting in the forced taking of his business empire with no payment in return and include efforts by agents of the Russian State to force Mr Pugachev to sign certain contracts and documents adverse to Mr Pugachev’s interests. Such efforts by Russian agents include threats to his personal physical safety and that of his family. Further actions by the Russian State include a pending unfounded criminal prosecution initiated against him that is claimed to be politically –motivated and related to improper and unsubstantiated civil claims against Mr Pugachev concerning his alleged involvement in the bankruptcy of the International Industrial Bank of Russia.

Mr. Pugachev’s arbitration claim was registered by the Permanent Court of Arbitration located at the Hague, Netherlands on September 21, 2015. In accordance with eh french & Russian Investment Treaty,  the Arbitration Rules of the United Nations Commission on International Trade Law of 1976 (United Nations Commission on International Trade Law,  UNCITRAL) govern this arbitration procedure.

King & Spalding law firm based New York assisted in the preparation of the Notice of Arbitration. Starting in 2016 a Paris-based law firm specializing in investment arbitration, Lazareff Le Bars,  represents the interests of Mr. Pugachev.

On June 17, 2016  Sergei Pugachev’s counsel appointed Professor Thomas Clay as arbitrator to the Hague court to consider the case against the Russian Federation. In accordance with article 7 of the UNCITRAL Rules, the Russian Federation had 30 days to comply with procedures in the United Nations Commission rules agreed to by Russia in the Treaty.

On 15 July 2016 the Russian Federation confirmed to the President of the Permanent Court of Arbitration in The Hague and legal counsel for Mr. Pugachev that Russia would participate in the procedure and it recognized the jurisdiction of the designated court.

However, as a result of Russia having failed to respect the rules and deadlines required for the nomination of its arbitrator by 8 August 2016, Russia lost the right to appoint an arbitrator and as a result on 19 August 2016 the Secretary General of the Permanent Court of Arbitration appointed Professor Bernardo Cremades on behalf of Russia.

Russia’s appointment of David Goldberg as leal counsel is unsurprising given his prominent role as a member of the government body overseeing efforts to delay and frustrate payments due to Yukos from an Energy Charter Treaty award against Russia. “The choice of David Goldberg as legal counsel in the case against Sergei Pugachev demonstrates that the Russian Federation recognizes the weakness in its legal defense against Mr Pugachev’s claims. Starting in 2010 the actions of the Russia State against Mr Pugachev are clearly violations of international law as noted by the UK High Court in London during hearings held in 2015. Goldberg is not White & case law firms top specialist in investment arbitration before the Permanent Court of Arbitration. Mr Goldberg will no doubt attempt to assist Russia in continuing to avoid its international treaty obligations. Therefore it is clear that – even before the first hearing – Russia is employing a strategy that does not defend the State against its illegal activity, but instead tries to defend assets against the seizure that will take place by Mr Pugachev after the success in his arbitration procedure.” said Michael McNutt, Senior Litigation Advisor to Mr Pugachev.

PRESS RELEASE: Official Statement by Sergei Pugachev’s Press Office

November 20, 2015 – In response to recent publications in the Russian media reporting that the Russian law enforcement agencies have involved Interpol in their quest to establish Sergei Pugachev’s whereabouts, the Press Office states the following:

Sergei Pugachev, a citizen of the Republic of France, has been living in France with his family since the beginning of the 90s, and since 2010 Mr. Pugachev is living in France on permanent basis.

Mr. Pugachev renounced his Russian citizenship in 2012 in connection with the expropriation of his assets in Russia. At the end of 2014 the Interpol Russian Bureau placed Mr. Pugachev’s name on its wanted list. In 2015 Mr. Pugachev’s name was removed from the list following the appeal filed by Mr. Pugachev’s French lawyers to the Interpol Central Bureau. Today Mr. Pugachev’s movements around the world are not restricted.

Sergei Pugachev and his lawyers believe that the allegations by the Russian authorities targeting Mr. Pugachev are politically motivated and judicially groundless. The legal team is awaiting action proceedings at the International Arbitration Court in the Hague in regards to Mr. Pugachev’s $12 billion compensation claim against the Russian Federation.

Sergei Pugachev is being represented by one of the world’s biggest American law firms, King & Spalding LLP. At the moment legal procedural steps are being taken to obtain interim measures in the form of seizures of the Russian Federation’s property in various jurisdictions.

Sergei Pugachev’s Press Office

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PRESS RELEASE 20.11.15 PDF VERSION

PRESS RELEASE: International Arbitration Claim Launch

Pugachev Files International Arbitration Against the Russian Federation Over Violations of the France-Russia Bilateral Investment Treaty with Estimated Damages of US$ 12 Billion

PARIS, France, September 22, 2015 – Mr. Sergei Pugachev, a French national and international businessman, has filed an international arbitration claim against the Russian Federation for damages estimated at US$12 billion citing violations of the country’s obligations under the France-Russia Bilateral Investment Treaty and international law. The complaint stems from the Russian Federation’s mistreatment of Mr. Pugachev and his investments, outright taking of several multi-billion dollar investments without paying any compensation, coercion of Mr. Pugachev to enter into transactions on unfavorable terms, threats to the security and wellbeing of Mr. Pugachev and his family, and sham criminal proceedings against him. The arbitration proceeding has been commenced under the 1976 Rules of the United Nations Commission on International Trade Law.

Mr. Pugachev’s claims relate to the Kremlin’s campaign and targeted strategy, since 2009, to strip him of his valuable investments without paying him any compensation whatsoever. Among the investments that the Russian Federation has taken are: (1) the Red Square 5 development project, which was authorized to build a major hotel and residential complex in Moscow; (2) the Shipyards, Russia’s biggest and most modern shipyards, which included the nation’s leading designer of icebreakers and builder of military ships and commercial vessels; (3) the EPK, a company that held the exploration and extraction license to develop one of the richest coalfields deposit in the world located in the Tuva region in Russia; and (4) Optik Trade, which owned and planned to develop land plots in the Moscow Region and the related Gribanovo development project. The Russian Federation also has instituted and pursued sham civil and criminal proceedings against Mr. Pugachev, with the expressed intent to ruin Mr. Pugachev and his family. The Russian Federation is using these unfounded proceedings as a basis for exporting its persecution and harassment of Mr. Pugachev to other jurisdictions, like the U.K. or Switzerland, which has inflicted additional harm on Mr. Pugachev. Those actions ultimately also resulted in the loss of investments in countries outside of Russia. All of this conduct is in breach of Mr. Pugachev’s rights under the France-Russia Bilateral Investment Treaty and international law. In addition, legal counsel is exploring the possibility of a claim also to be brought against Russia for violations of the European Convention on Human Rights as a result of the treatment of Mr Pugachev.

“Over the past few years, Russia has pursued a multi-pronged attack against me, my family, and my investments. I refuse to be intimidated by Russia’s tactics, and I look forward to having an international arbitral tribunal assess Russia’s conduct by applying international standards,” said Mr. Pugachev.

“Mr. Pugachev’s filing today should not come as a surprise,” added Mr. Edward G. Kehoe, of King & Spalding LLP, lead counsel to Mr. Pugachev in the international arbitration proceedings. “Russia’s conduct violates the Bilateral Investment Treaty’s guarantee of fair and equitable treatment and prohibition against unlawful expropriation with respect to French investors, among other protections.”

“Russia cannot continue its worldwide persecution of Mr. Pugachev with impunity. This international arbitration proceeding is intended to hold Russia to its international obligations under the Bilateral Investment Treaty”, said J. Michael McNutt, Senior Litigation Advisor to Mr. Pugachev.

Mr. Pugachev is not alone in highlighting Russia’s misconduct and its hostility towards foreign investors. At present, over ten (10) investment treaty arbitrations against Russia are pending. Most recently, an international arbitral tribunal ordered Russia to pay former shareholders of the OAO Yukos Oil Company approximately $50 billion in compensation for unlawful expropriation through a series of targeted measures taken between 2003 and 2007.

Mr. Pugachev’s notice of arbitration has been delivered to the Minister of Economic Development of the Russian Federation, as well as to Russia’s President, Minister of Finance, Minister of Foreign Affairs, and Minister of Justice of the Russian Federation. Upon appointment of the arbitrators to hear the case, the tribunal will establish a schedule for briefings and arguments on the merits.

Copies of the petition in English, as well as related materials, can be found on the ‘Litigation’ page at www.pugachevsergei.com.

PRESS RELEASE: Pugachev Forced to Leave London Due to Severe Threats Against His Life

LONDON, 9 June 2015 – Sergei Pugachev, a French citizen, former Russian Senator and business magnate is confirming today that he was forced to leave London and the UK due to serious concerns regarding his personal safety and increasing harassment, as part of an unlawful seizure of his assets by the Russian State.

The difficult decision to leave the UK was made after suspicious devices were discovered to have been illegally fitted on his cars. The anti-terrorist unit SO15 is investigating the crime also as a potential bomb threat and has identified the suspects.

In July 2014, The Russian State initiated interim measures in the UK to support their continuous abuse in the form of the civil case in Russia. Beyond these, there were no other claims against Mr. Pugachev in the UK.

To fight the unlawful expropriation of his business assets and forced financial ruin Pugachev has initiated an international arbitration claim against Russia.

Until his departure, Pugachev had been under the protective watch of British police, he wishes to return to the UK after the threat to his safety will be resolved:

“Even if I had police protection, had I stayed, I would still feel that my safety was severely compromised. I will return to the UK once I can be assured that the threat against my life has been eradicated”

Press Office of Sergei Pugachev